If these changes go through, mine owners and operators will be subject to a new regulatory system under which the State will assume a far greater and centralized role in various aspects of SMARA, including mine inspections, enforcement, and establishment of financial assurance mechanisms. The mining industry also faces the likely prospect of increased carrying costs, arising from such proposals as changes to the annual reporting fee structure (proposed at a minimum of $1,000/year on a per-acre basis, and with no maximum cap), to increased ability to appeal decisions relating to the State’s “3098” list.

Specifically, SB 1270 proposes the following notable changes:

Designation of the Office of Mine Reclamation as the “Division of Mines”, to be headed by a new “State Mine Inspector”.

The State Mine Inspector would be responsible for mine inspections, shifting inspection duties away from local counties and cities.

Establishment of a minimum $1,000 annual reporting fee, assessed on a per-acre basis and without any maximum fee limit.

Creation of a mandatory notice of violation and remedial process to be undertaken by counties and cities for non-compliance with SMARA. Previously, counties and cities had discretion to undertake such actions for non-compliance with SMARA.

Transfer to the Director of the Department of Conservation sole authority for proposing financial assurances (e.g., bonding requirements) for new or amended mining operations. The Director would also be granted the authority to review and change all existing financial assurances via an administrative decision by January 1, 2016.

Significant expansion of appeal rights of decisions by the Department of Conservation (“Department”) to list, de-list, or failing to list or de-list, mining operators from the States’ “3098 List.” Specifically, the proposed change would allow lead agencies and “affected persons” (i.e., members of the public) to appeal any such decisions. Mining operations not on the list are precluded from selling sand, gravel, aggregates or other mined materials to state or local agencies. Since OMR updates the 3098 List at least quarterly, the proposed change could subject mining operations to quarterly challenges relating to listing/de-listing decisions.

Creation of a process under which counties and cities can unilaterally decide to forego their lead agency duties under SMARA, and transfer such duties to the State Mining and Geology Board (“SMGB”).

Addition of a requirement that reclamation plans for mining operations be certified by a registered professional geologist, geophysicist, or professional engineer.

Addition of a requirement that reclamation plans include schedules for reclamation that must be updated annually based upon the “then-current’ condition of the mine site.

If enacted, SB 1270 would signal significant changes to day-to-day mining operations in the State, and threatens to add new or increased hurdles to mining operators. This coming legislative session promises to be one of the more important sessions to the mining industry in recent memory, and all mining interests in the State need to keep abreast of SB 1270 as it works through the Legislature. Our firm is actively working on SB 1270 so stay tuned for updates in the coming weeks and months.
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Kerry Shapiro is a partner at Jeffer Mangels Butler & Mitchell LLP, and has represented the mining and building materials industry on government, land use, environmental, and public land matters for 25 years. He has extensive experience working with SMARA, CEQA, the Mining Law of 1872, NEPA, the Endangered Species Act, FLPMA, the Mineral Materials Act, and other public land and environmental laws. Kerry also serves as General Counsel to the California Construction and Industrial Materials Association (CalCIMA), and has worked on a number of important legislative reforms for the building materials industry. Contact Kerry at KShapiro@JMBM.com or 415.984.9612.

Kerry Shapirois the Chair of JMBM's Natural Resources and Mining Group and co-chairs its Construction and Building Materials Group. Kerry serves as General Counsel to the California Construction and Industrial Materials Association (CalCIMA), and chairs the association's Legal Action Committee. He has represented the mining industry on mineral extraction and land development projects for over 25 years, providing legal services on government, land use, environment, and natural resources matters, at federal, state, and local levels. His experience includes securing entitlements for the largest federally-approved sand and gravel project in the United States, obtaining the first vested rights confirmation from the California State Mining and Geology Board for the largest aggregate deposit in California, and successfully representing mining companies before the Ninth Circuit Court of Appeals and state courts of appeals on mining, CEQA and federal endangered species matters. Contact Kerry at 415.984.9612 or KShapiro@jmbm.com.

Martin StratteMartin Stratte is a land use and environmental attorney who assists with the entitlement of complex projects throughout California in accordance with CEQA, NEPA, and California's greenhouse gas emission and climate change regulations. He also represents clients in related litigation. Contact Martin at MStratte@jmbm.com or 415.984.9627.

Jordi Venturais a member of JMBM's Natural Resources and Mining Group. His practice focuses on the representation of mining companies in Latin America, where he has conducted effective mining legal diagnoses and effective diagnoses of social licenses to operate. He represents the mining industry in mining leases, joint venture and operating agreements, option agreements, exploration and development agreements, and mine operating contracts. He has been the lead attorney in mergers and acquisitions, divestitures of business entities and other land transactions. Jordi Ventura is licensed to practice in Utah and Colorado; he is not licensed in California. Contact Jordi at JVentura@jmbm.com or 415.984.9689.